ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An economic situation where no individual would be better off doing something different.
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Description of market / economy that takes all opportunities to make some people better off without making other people worse off.
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Fairness; everyone gets his / her fair share.
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All other relevant factors remain unchanged.
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Detailed explanation-1: -If this refers to a market for a single good, service, or factor of production it can also be referred to as partial equilibrium, as opposed to general equilibrium, which refers to a state where all final good, service, and factor markets are in equilibrium themselves and with each other simultaneously.
Detailed explanation-2: -The types of economic equilibrium include microeconomic and macroeconomic. In microeconomics, supply and demand between buyers and sellers are balanced. With macroeconomics, an economy achieves a balance of aggregate demand and supply. Competitive prices are an integral part of the theory.
Detailed explanation-3: -Partial equilibrium is an equilibrium situation achieved taking into consideration only a part of the market condition. That is, it is the equilibrium with regard to an individual unit assuming the effect of other units and variables constant.
Detailed explanation-4: -Economic equilibrium – example Potato sellers price a bag of potatoes at $5. However, nobody comes and buys any bags of potatoes. Therefore, demand is way below supply.
Detailed explanation-5: -The balancing effect of supply and demand results in a state of equilibrium. Disequilibrium occurs when this adjustment of supply, demand, and/or prices does not work as theorized. Market forces tend to restore disequilibrium states back to their equilibrium.